LIABILITY OF FOREIGNERS TO PAY 100% TAX ON
ACQUIRING PROPERTIES
If a non citizen (foreigner) or a Company
incorporated in Sri Lanka with more than 25% of foreign participation in the
equity of such company purchase an immovable property in Sri Lanka a tax of
such amount as is equivalent to the value of that property shall be paid to the
central government of Sri Lanka subject to certain exceptions mention below.
Exceptions : Any land the ownership of
which is transferred to an enterprise to which the Board of Investment of Sri Lanka has granted
authorization in writing to set up on such land
a)
a project for the construction of not less than 100 residential housing units,
each constructed on land not exceeding 10 perches inclusive of appurtenant
land, or a condominium property within the meaning of the Apartment Ownership
Law comprising not less than 100 units for residential or non-residential
accommodation, provided that the total value of said land is met by inward
remittance of foreign currency.
b)
a project for the construction and operation of a hospital or a hotel provided
that the total value of said land is met by inward remittance of foreign
currency and that the investment on the project be not less than 10 Million USD
or its equivalent in Sri Lanka Rupees.
c) a project relating to infrastructure
development or any other development determined by the minister as being
essential for the economic progress of Sri Lanka, provided that the value
of said land is met by inward remittance of foreign currency and the investment
on the project be not less than 50 Million USD or its equivalent in Sri Lanka
Rupees.
d) a project relating to service sector
including BPO industry, IT related training institution, educational
institution, determined by the minister as being essential for the economic
progress of Sri Lanka , the value of said land is met by inward remittance of
foreign currency a and the investment on the project be not less than USD 2
Million or its Rupee equivalent and that such projects employs not less than 50
local persons.
e)
a project solely for the manufacture of
non-traditional goods for export, for the establishment of its manufacturing
plant , office, storage facilities, dormitories for workers provided that the
value of said land is met by inward remittance of foreign currency and the
investment on the project be not less than 1 Million USD or its equivalent in
Sri Lanka Rupees.
f)
any condominium unit of a condominium
property situated on or above the 4th floor of such condominium
property, the ownership of which is transferred to a person who is not a
citizen of Sri Lanka,
provided that the value of such unit is met by inward remittance of foreign
currency. In computing the number of floors in a condominium property, a floor
which accommodates any common elements within the meaning of the Apartment
Ownership Law in excess of ½ of the floor area of such floor shall not be taken
into account.
In addition to the above tax ,
STAMP DUTY APPLICABLE WHEN ACQUIRING IMMOVABLE PROPERTIES
In terms of the Stamp
Duty (Special Provisions) Act;
(i) where the value of
the property is Rs.100,000/- or less
For every Rs.100/- or part thereof of the
value 3.00
(ii) where the value of
the property exceeds Rs.100,000/-
For every Rs.100/- of the value not
exceeding Rs.100, 000/- 3.00
And
For every Rs.100/- or
part thereof of the value exceeding
Rs.100,
000/- 4.00
REQUIREMENT OF NOTARIAL ATTESTATION
In view of the provisions of Section 2 of the Prevention of Frauds Ordinance
following classes of contracts are of no force or avail in law unless in
writing and signed in Sri
Lanka in the presence of a licensed notary
public and two or more witnesses and duly attested.
(a)
Any sale, purchase, transfer, assignment or mortgage of land or other immovable
property;
(b)
Any promise bargain contract or agreement for affecting any such object and for
establishing any security interest or encumbrance affecting the land or other
immovable property;
(c) Any contract or agreement
for the future sale or purchase of land or other immovable property.